August 17, 2010

The union government is trying hard to get political opinion and votes in parliament in its favour on the nuclear liability bill. Without this law, foreign companies will not invest in nuclear energy in India and the benefits of the hard-won concessions from N-powers will not be realised. The government wants the bill to be passed in the present session of parliament, before the proposed Obama visit. The parliamentary standing committee is to give its report tomorrow, after which the government will have to win over parties opposed to the bill in its present form. But there seems to be great pressure on the government from the foreign suppliers not to raise liabilities too overbearing for them.

What make the bill so contentious are such provisions: (i) the financila liability on the operating company is capped at Rs. 500 crore [about $ 0.1 billion], (ii) the supplier is indemnified against any accident, even due to design flaw, and (iii) there is a mention of joining CSC, an international convention, that will put certain obligations on India regarding indemnity to foreign equipment suppliers.

It is reported that the government is trying to soften BJP by agreeing that the nuclear power plants will remain in the public [=government] sector. The government is also arguing that the cap is quite on the high side and accidents to that level have not taken place with so many nuclear plants in operational world wide. Moreover, the supplier, operator and all concerned will be made liable to stringent penalties. It is also argued that there are only four suppliers of nuclear reactors in the world and two of them are already functional in the country. By bringing the first ever such legislation in the country, they too are being made accountable in the event of an accident.

The bill will be passed and, take my word, there will be no great modification in the bill. BJP must already be in search of some face-saving formula to support the bill, and the left is as irrelevant as ever. If need be, the splinter groups can be 'cajoled' to support the bill. No further arguments on that, though TV channels, papers, politicians and people at large will continue to argue on the topic for many weeks to come - till the bill is passed.